360 ONE Focused Equity Fund Regular Reinvestment of Income Distribution cum Cap Wdrl INF579M01894

360 ONE Focused Equity earns an Above Average Process Pillar rating.

The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 100%. The measure indicates the percentage of a firm's funds that have outperformed their respective category's median return for the period. Excellent risk-adjusted performance also supports the process. This can be seen in the fund's 10-year alpha calculated relative to the category average, which suggests that the managers have shown skill in their allocation of risk. However, the process is limited by being an actively managed strategy. Historical data, such as Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy tends to pick smaller market-cap firms compared with the average fund in its peer group, the Focused Fund Morningstar Category. But in terms of style (value/growth) exposure, it is similar. Examining additional factor exposure, this fund has constantly tilted toward stocks with higher trading volumes than its Morningstar Category Peers over the past few years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also demonstrated more exposure to high-momentum stocks over peers in recent years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. Compared with category peers, the strategy also had more exposure to the Momentum factor in the most recent month. Additionally, this strategy's portfolio has held more stocks with high dividend or buyback yields than peers over recent years. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts stock performance. Nevertheless, the fund's Yield exposure was in line with peers in the latest month. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in industrials and communication services relative to the category average by 4.4 and 3.9 percentage points, respectively. The sectors with low exposure compared with category peers are consumer defensive and energy; however, the allocations are similar to the category. The portfolio is composed of 33 holdings and is quite concentrated. In particular, 55.7% of the portfolio's assets are housed within the top 10 holdings, as opposed to the category’s 33.4% average.